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250 FEDERAL For r~lease afternoon Tuesday, ~y 6,1919. ~pers, BUSINESS RESERVE BOARD X--1511 STATEMENT FOR THE PRESS .. CO!IDI~IONS IN .APRIL 1919. During the month<..cf April business prospects hd.ve improved, reta-il tra.de has incre~sed in volume, prices have apparently a.ssumed a more position, and business generally is considered on a stronger ing. The floa.ting supply of labor which ~d ~d stable better foot- threatened a.. considerable awount of unemployment dUring the months of February a.nd 11a.rch ha.s been pa.rtia.lly absorbed a.nd the prospect of a. large gra.in crop promises still further opportunity for the use of the entire labor SupflY~ Fede~al Reserve Agents almost without exception report a growth in confidence a.nd improvement in general trade a.nd industria.! conditions. ~uf~cturing is still rcta.rded in steel and some other basic industries, but there is improvement in the copper and lea.d situation. Textile manufacturing, both in wool former, is improving. The ex~ort nancial conditions have been ~nd cotton, pa.rticularly the tra.de of the month has been large ~iet ~nd ~nd fi- reassuring. In the First rFedera.l Reserve District "the turn in the tide of business. which wa.s beginning to be felt a month ago, becomes increa.singly evident each week, and the impression is becoming general thd.t no low~r price level will be established at least for some time. This is having the effect of encouraging buyers to place orders with more confidence, and manufacturers ~r~ going ~he~ in a surprisingly satisfa.ctory manner. It will be a long tiffie before all sections of this district are back again on a. strictly pea.ce basts end before labor a.nd na.terials are a.ga.in evenly distributed, but the period of vr.n.ewployment a.nd stagnant business, •ilh ich many expected, shows no sign of r.ateria.lizing, a.nd the trend is decidedly in the other direction" 25:1 - 2 -· From the Second Federal R3serve Distrir.t it is reported that growth in confidence is manifested !lin the mo!"e numerous adva11ce orders placed with wholesalers for the fall. Certain l~nes in the ordinary distributive trade, such as jewelry, automobiles, and musical instrwnents, are very active. Retail trade, including the rr.ail-order business, has contin.ucd to 3xpand, and production in textile mi..lls has 5.ncreased 11 • District No. 3 reports re- tail trade "wonderfully good and reports from all parts of the district very encouraging." Reports from District No. 4 state that "the whole indus- trial field is breathing easier, and gains along practiccl.ly every line, while in many cases infinitesirr~l in scope, reflect a condition whiCh gives indication of progress both steady and permanent." From District No. is stated that there is indication of "increasing confidence 5 it and stability 11 ; from District No. 6 that "during the past month there has been an increase in practically all lines of business"; from District No. ( that "fundamental conditions, aside from a lack of confidence in the stability of the present price level, are considered sound"; from District No. 8 th3.t "bus·iness activity continues to inq>rove with the further readjustment of prices, and in some lines it is :p:racticall.y normal"; from District No. 9 that 11 the general outlook throughout the district is very good"; f!"om Distr:i.ct No., 10 that "a more hopeful spirit seems to prevail and in most lines of industrial. activity things have assumed a cheerful aspect." speaks of "unparalleled prospectlil for buying. bu~er The Tenth District further crops" and of an inc::ea<Je in In the Eleventh District it is stated that "a sound and normal business is being transacted"'; from the T'Nel:fth District it is reported that "manufacturing and industry are fair, but increased activity is expected, due to ill!Proved labor conditions," wh:i.le agriculture and stock-. raising enterprises are said to be in excellent condition. X-1511 252 - 3 Possibly the most conspicuous feature of the whole business situation is found in the fact that prices have apparently been somewhat "stabilized". Marked declines are still reported here and there in some special lines, but from nearly all districts it is reported that the uncertainty concerning prices has been mitigated and that business men now expect that existing levels of prices will be substantially maintained for some time to come. The Bureau of Labor's commodity index numbers show that the decline in prices noted during the past three months has now not only been checked, but that prices as a whole have apparently taken a slight turn upward, the general index number increasing from as further analyzed in 197 to 200. This general situationt the Eoardts compilations, shows that during March· the decrease in price of producers' goods continued; the index number for the group standing at 189 as compated with 191 for the month of February. Ti.le decrease is paralleled by a decrease in the prices of raw mineral products, the index number for which. group stands at 170 as compared with 173 for the month of February. The index numbers in the case of consumers 1 goods and the other groups of raw materials, however, show an incx·ease. This is particularly marked for farm products and animal products in the latter group. the index numbers increasing respectively from 222 to 235 and from 208 to 216. During the early part of April a further strengthening of prices in many lines has been noted. Efforts at Governzr.ent price fixing are still under consideration, the difficulty of bringing about a definite adjustment in connection with steel, coal, and other basic articles having as yet proved insuperable. This leaves those industries without a standard price level recognized by the Government, but with the expectation on the part of dealers that prices will not decline materially below present figu~es. - 4 -X-1512. The most import~nt industri~l development during the month of April h•.~-s und.oubtedl;r been the Governrcent ~s estimc:~.te for d.CTe~ge .;llld prnd•tr.~tion principal a.gricultura.l crops. The forec;l.:.;t and showed a. condition of 9) .. e7 per ever recorded on the l.J.rgest whea.t wa.s concerned. The st~nces ~rea.ge fC''!" gt"..:~.:i.n Ci;!r~·i:;, or w.l.s u..:.l.r1.e p1~l1li.::; the higb.cst of the en April 8 co~d.i~·.ion percentc:~.ge ever under cultivd,tion, so f~r ...a.s winter ~sti.m.3.ted yield of winter whe..l.t u."'lder these cir.'c.um.· cereal is 837,000,000 bushels, with other/crops in a.~ost e~u~l~ p~o~ising condition so far a.s c~ the Middle West it is conditions are be foreca.st a.t this se..l.son. From the whea.t district of st~ted sa.tisf~tory, that spring wheat seeding is well a.dv~ced while winter wheat and other cereals ~ve th~t Jnd come through the sea.son in excellent condition. On the Pa.cific coa.st crop condi Uo:;.'ls a.re unusually fa.vora.ble, wheat sown in the fall ha.s wintered well, the acreage of winter wheat is cOnsiderably greater tha.n that of last year, while other products of the soil promise an unus~lly abund~t outturn. Practically all growing crops in the South and Southwest are reported as satisfactory, there being a. good outlook for incred.sed movement of grai~ for large yield per acre. The a.cre~ge ~nd to the markets continues in sm3ller volume, due to marketing in the fall a.nd early winter. Domestic flour derodlld ~ of foreign ma.rkets to American wheat ha.s tended to raise prices. he~vy the open:i.ng of Receip~s corn a.t the principal narkets a.re comparatively small ani the same is true of oa.ts and other gr.l.ins. Flour milling bas illq)roved during the month a.nd in son1e sections is as much as 50 per cent above the total for the correspondjng ~te in 1918. Production during the month a! March wa.s 10,247,000 barrels·, corupa.re·i with 7,736,000 during the month of February ~d 12,994,000 during .J.S Jd.n~ry. The stocks d.t the mills show an increase from -3,544,000 a.t the close of Febru3.ry to 4,578,000 barrels at the close of ~rch. As for live stock, movements to the primary markets of the Southwest show same decrease as coropa.red with while a. stea.dy rise in hog prices since the removal of the Government ~ year ~go, gua.r~teed figure of $17-50 bas been observed. The price of hogs at about the middle of Digitized for~ril FRASER'was i20.00. The decrease in the receipts of hogs during Mbrch bas been 253 254 :C-1511 - 5espeei~lly pronounced. receipts at 60 ~rkets for the month being 3 1 632,874, ~s compared with 4,4o4, 751 during Februo.ry ~nd 4,444,4o6 during r.arch,l91S. The figures of receipts of cattle and of sheep likewise show a. f~lling off from the figures for MarCh,l918, though both are slightly above the figures for February of the present year. This condition-is reflected in reduced purchases by packers during Much. The reports indicate that packers r operations in prilll""ry uarkets were reduced 9 per cent in ca.ttle 1 1 per cent in hogs, 5· 7 per cent in calves, as c~red with p~rcbases for slaughter in March 1918. Stocks of beef in the United States on April 1 are reported to show a heavy decline from the March l figure, although for pork products no material change is noted. There ~ppears to have been a continuance of the heo.vy export movement of meat products which was so well susto.ined during the winter months. The fact th:A.t the industry bas been released as of April l from industrial control by virtue of a. procl:wla.tion signed by the President, leaves the price and movement of the product to be regu.it lated by demand and supply. In the cotton-growing regions the prospect for yield is satisfactory, weather conditions having been good, but owing to efforts to bring about a curtailment of acreage it is now estimated in some sections that a. reduction in the tota.1 area of liind under cultivation amounting to per cent to 20 per cent of the ~rea.ge of 1918 will be effected. <3.S much a.s 15 X-J.5ll 6- 255 In the rranufacturing industry fundamental interest continues to center • around the steel situation. This is still undecitled because of the failure to arrive at a definite price policy for the coming months. So far as known, the schedule of prices tentatively agreed upon between the Goverruuent and representatives of the industry during March has continued practically in effect. Latest reports indicate that the mills of the United States Steel Corporation have been running at 7lt per cent of ca:paci ty, while independents are running at 45 to 50 per cent of capacity. Pig-iron production during March was 3,090,243 tons, as compared with 3,14l,lb0 tons during February, the respective index numbers being 133 and 136. Steel-ingot production like- wise declined, production in March being 2,262,265 tons, corresponding to an index number of lll, as compared with 2,668,011 tons during February, the index number for the latter month being 121. United States Steel The unfilled orders of the Corporation have continued to decline, standing at the close of Md.rch at 5, 430, 572 tons, as conwared with 6, 010,7 87 tons at the close of February, the index numbers, respectively, being 103 and 114. It is reported from Dallas that the present situation in the copper industry "has nothing about it to stimulate enthusiasm, n the market being practically at a standstill, while during the past month there have been low as 14t cents. ~uotations as T.he curtailing of output from 30 per cent to 50 per cent has had little effect on reducing the world's surplus, as sales have not equaled the reduced output. These conditions have been in :process of slow re.c; tU'ica.tion since the middle of the month. The copper situation has become more encouraging during the month of .April,· some considerable sales being reported at prevailing prices. Lead ores hav'e declined in value, but the demand for them remains firm, and there is no accumulation of sur.plus stocks. Zinc has shown a downward tendency, but with com~aratively heavy shipments. Productian of both metals has been considerably Qecreased during the past continues several months. In coal, production . at about the same rate, but ( 256 - 7the present demand is naturally very light.. O:rde.:..-s for the coming winter's supply have not yet begun, while some plants which are usually heavy consumers have suspended demand. In the West Virg1nia district conditions show little improvement, and sales of mining machinery are slow. Biturninous coal production during the month of March with was 33,716,000 tons, as compared 31,497,000 tons during the month of February. The daily production the of anthracite coal declined somewhat from/February figures, total production for the month being February. 3,938,907 tons, as compared with 3,871,932 tons during The respective index numbers were 70 and 74. Figures for pro- duction of both bitumdnous and anthracite coal are very much below those of a year ago, when bituminous coal production was of anthracite and 7,276,777 tons, the index numbers being, respectively, 131 129. The production of beehive coke has continued to decline, amount- ing during March to as compared with was 48,631,115 tons, and that 1,768,449 tons, corresponding to an index number of 68 1,822,894 tons during February, the index number for which 75· In lumber, markets show generally a firm tone, with demand still up toward the output and practically no decline in prices, but on the contrary, advances in various grades .. In general manufacturing, conditions still continue so~hat "spotty 11 • In many sections mills have smaller stocks than usual, but with an improving demand both for goods and for yarns, while many factoriw.s ara estimating on new orders and showing a larger interest in the situation. The depleted condition of retail stocks has led to purchases of a hand-to-mouth variety, even on the part of dealers who do not wish to commit themselves fully as to the future. Greater activity in reported by wholesalers and jobbers. pr~~aration for the spring trade is It is predicted in some quarters 257 X-1511 - 8 ..; I that demand from now on will be sufficient to enable the South to without further sacrifice of the cotton it is in the cotton-milling regions are still carr-y~ng. ~tnsettled. di~ose Labor conditions In the woc1en trade demand for men's wear has become very much more active. A of orders has been developed during From Ricbmond ·~e IIIOnth of April, large volume it is reported that business is still dull with the underwear and blanket mills, but in other lines mills are reported as having re~lized much benefit from the :policy of drastic ·price reduction initiated two months ago. The industry is now regarded as being once more upon a normal basis so far as volume is concerned, while raw wool has recently sold at auction upon a basis of parity with the Government prices. The automobile industry is apparently fully occupied and is running on the basis of about 90 per cent of existing facilities. In leather and shoes the principal companies have reported phenomenal profits and prices are strongly maintained with abundant orders. The lifting of the English embargo on the cheaper grades of leather has stimulated foreign demand. - 9 General labor cand.itions c1.re improving, ~ d~stricts X-1511 From many of the rrunufacturing they a.re reported. a.s fairly sa.t:i.sfa.ctory .. The q.1estion of wd.ge re- 258 adJustment ha.s ma.d.e compara.tively little progt·ess a.nd labor continues to be employed on nearly a W'd.r basis of rci.tAut:.er,;j.tion. The volume of unem:c,:loyruent on the Pacific coast is very much less New England.. t~n agof~nd a. month the same is true of From many sections a. shortage of fann hands is reported. Partial revival in the building trad.es prQmises to opert a consider~ble new field of demand for labor heretofore uhemployed or obl!ged to seek occup""tion in other lines of industry. The labor situation is less sa.tisfd.ctory on the sea.b~rd ~~tl"'"ntic than in the interior, due to the fdet tha.t consid.erable numbers of re- turned soldiers have failed to redistribute themselves to their points of origin. In the Middle West,especially in the chief a.gricultura.l regions, the situcl.tion has decidedly improved. Export trade during the month has continued. large, although it consi~ts predominantly of raw ma.terials a:ld articles for further rrld.nufa.cture. Nevertheless, interest in the export trade cont:.nues una-bated, d.nd. several irnport ....nt developments have occurred during the month. Ship~ing rd.tes have shown a decided down- ward tendency, while the organization of an investment trust for the pu!'}.;ose of encouraging the absorption of foreign securities practical financing of export business~ h~s made ~ The organization of beguming in the ~ssoci~tions underthe Webb law for the purpose of facilitating foreign trode. indicates a. continuous interest on the part of manufacturers, both of markets abroad. Two export organiz~tions of the banking industry and twenty-five ~rge and small, in the development have been formed by ~rge import~nt membars lumber mills have united for the same purpose. Similar activity is reported in a number of other lines .. A cotton export corporation organized to facilitate the distribution of cotton in other countries and its steady movement from the United States is projected. The announced action of the economic council a.t Paris, 1!lclde public on April 23, by virtue of which the black list is to be abolished ani the system of licensing exports for shipment to foreign countries term:i.na.ted) is regarded in many lines " 259 . X-1511 - 10 - of trade a.s promising a much better opportunity for foreign shipments. Parci.llel .::a.ction has been announced by the War Trade Board on Apri 1 23. Financially the month has been quiet. The Board 1s compilation of interest and discount rates from the principal centers shows relatively few fluct~tions and these not of a character to indicate any decisive trend. The greatest variations have been noted in connection with call money, which has fluctuated from cent to around 6i 5i 3t per per cent, but has been firm during the latter part of the period at per cent. The supply of bank acceptc~.nces has been srru.ll and total volume in the market indicates a falling off. There has been a tendency to shorten rDaturities of co.u.."er~i.::a.l paper considerably, while the <iken...:l.nd for tbe best nclmes has been very satisfactory. The opening of the Liberty loa.n campaign on April 21 bas tended to hold various industrial enterprises in check, pending the cowpletion of the Government Is requirements. As a. rule, the policy of bankers ha.s been to conserve their lending power until after the loa.n has been fully disposed of. Some tendency to liq!dation was noticed among the banks prior to the offering of the Victory loan, the effort of these institutions being to reduce their outstanding commitments wherever reasonably possible. Feder.::~.l reserve notes b..:l.ve incred.sed somewhat during tbe early part of the month, but later showed a slight tendency to fall off. The prospects for moderate accommodation to business and industry appear to be encouraging, most ba.nks of lending power • • ~ving still ~ subst~ti.::~.l ~rgin
@FedFRASER